Richard Connolly CEO reflects on what was a really good year for Rentplus and the exciting opportunities that are opening up for Rentplus in 2017.
2016 was a landmark year for all of us at Rentplus. We started working with more developers and housing associations to build and manage our homes, we secured significant financial backing from major institutional investors, our pipeline has grown and our work is helping rent-to-buy become recognised as a mainstream solution to delivering a greater volume of affordable housing by all levels of government. All of 2016’s achievements wouldn’t have been possible without the strategic direction of the board and the hard work and dedication of all of our colleagues.
In 2016 we saw that our model is beginning to make a real difference on the ground. At Palmerston Heights, Plymouth, our first group of rent-to-buy tenants moved in. Many of our new residents had given up the dream of homeownership until they heard about our innovative model. One family that moved into the scheme were the Rafiqs. Like many of our other tenants they were stuck in private rented accommodation and couldn’t afford to save for a deposit. Now in their new home they are paying an affordable rent, benefitting from security of tenure, saving money every month toward buying their home and will enjoy a 10% gifted deposit from us when they go on to purchase it in five years’ time.
Former private renters are just one side of the story, however. Analysis of the other tenants at Palmerston Heights reveals that more than 30% were in socially rented accommodation before moving in. For councils and local authorities with long housing waiting lists this shows that rent-to-buy is a win-win. Not only does it free up social housing for those in need, it also enables tenants to fulfil their homeownership aspirations.
One of the ways Rentplus can help more people reach their housing goals is by continuing to attract outside investment in 2017. In 2016 we secured significant institutional funding from BAE systems’ pension fund, as well as from American investment firm Crestline. We are always on the lookout for more funders and hope to announce further deals soon. The money we have raised so far has been put to good use to expand our pipeline to new sites in places like Gloucestershire, Cambridgeshire, Oxfordshire and Devon.
Now we’re in 2017, I can say with certainty it will be a huge year yet for rent-to-buy. The springboard for this will be the detail of the Government’s Housing White Paper, expected to land in the middle of this month. It is rumoured that it will include an expansion of the definition of Starter Homes to include other affordable tenures like rent-to-buy. These changes will make it easier for rent-to-buy models like ours to be included as part of affordable housing on new developments, assisting local authorities to achieve their affordable housing targets and creating more balanced communities.
The expansion of rent-to-buy will be crucial to ensuring that we have a housing market that works for the many not the few. It will also enable us to work with even more partners to deliver more homes. 2017 is going to be an even bigger year for the business!